Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Hainan Island Construction / Event-Driven

<ul>
<li>After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.</li>
<li>CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.</li>
<li>In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.</li>
</ul>


After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.
CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.
In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.


Quiddity Aggregation of CSI300/500 and SSE50/180 Index Flows for Dec 2023: US$4.2bn One-Way!

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The announcement of the inclusion of <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber Technologies (UBER US)</a> in the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> was a big one last week. There were announcements for some other indices too.</li>
<li>There are many indices in China that will be rebalanced at the close on Friday, the biggest being the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KWEB US</a>.</li>
<li>Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.</li>
</ul>


The announcement of the inclusion of Uber Technologies (UBER US) in the S&amp;P 500 INDEX was a big one last week. There were announcements for some other indices too.
There are many indices in China that will be rebalanced at the close on Friday, the biggest being the CSI 300, CSI 500, STAR50, SSE50 and KWEB US.
Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.


Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

<ul>
<li>There are 14 changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX)</a> at the upcoming rebalance that will be implemented at the close of trading on 8 December.</li>
<li>While most changes are in line with forecasts, there are some stocks that have not been added or deleted as the index committee has used their discretion.</li>
<li>The adds outperformed the deletes in the first half of the year with performance staying stable over the second half of the year. Position for outperformance ahead of implementation.</li>
</ul>


There are 14 changes for the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 8 December.
While most changes are in line with forecasts, there are some stocks that have not been added or deleted as the index committee has used their discretion.
The adds outperformed the deletes in the first half of the year with performance staying stable over the second half of the year. Position for outperformance ahead of implementation.


CSI300 Index Rebalance: 14 Changes & A Few Surprises

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Malo Medical Management / Equity Capital Markets

<ul>
<li>Malo’s revenue had good growth, but revenue scale is still small. At the current gross margin level, it would be difficult to generate decent profits considering the large SG&amp;A expenses.</li>
<li>Dental care expansion is difficult. Malo would face the challenging such as lack of high-quality dentists and centralized procurement. Both would drag down profits and cash flow.</li>
<li>We are not optimistic about <a href="https://www.smartkarma.com/entities/malo-medical-management" target="_blank" data-smartkarma-citation="entities:40035:1" rel="noopener">Malo</a>’s share price performance after IPO. This industry’s profit mode is not mature. Most of chain dental services providers are still in cash-burning expansion stage.</li>
</ul>


Malo’s revenue had good growth, but revenue scale is still small. At the current gross margin level, it would be difficult to generate decent profits considering the large SG&amp;A expenses.
Dental care expansion is difficult. Malo would face the challenging such as lack of high-quality dentists and centralized procurement. Both would drag down profits and cash flow.
We are not optimistic about Malo’s share price performance after IPO. This industry’s profit mode is not mature. Most of chain dental services providers are still in cash-burning expansion stage.


Pre-IPO Malo Medical Management - Profit Model Is Not Mature; Future Expansion Is Worrying

Shulan Health Management / Equity Capital Markets

<ul>
<li>Private general hospitals are the core business of Shulan, but the business model for general hospitals is not good - heavy assets, challenging operations, low profits, difficult to expand nationwide. </li>
<li>Even with the endorsement of renowned academician Dr. Li Lanjuan, whether Shulan's hospitals can attract constantly sufficient patient flow remains a question. Most patients still prioritize public hospitals for treatment.</li>
<li>Due to the lack of solid profit model and expansion model, we're not optimistic about Shulan's profitability and future financial performance. Shulan may be in a state of long-term loss.</li>
</ul>


Private general hospitals are the core business of Shulan, but the business model for general hospitals is not good - heavy assets, challenging operations, low profits, difficult to expand nationwide. 
Even with the endorsement of renowned academician Dr. Li Lanjuan, whether Shulan's hospitals can attract constantly sufficient patient flow remains a question. Most patients still prioritize public hospitals for treatment.
Due to the lack of solid profit model and expansion model, we're not optimistic about Shulan's profitability and future financial performance. Shulan may be in a state of long-term loss.


Pre-IPO Shulan Health Management - Hard to Bring Investors Expected Returns Due to Poor Profit Model

China

Topchoice Medical Investment Corporation provides dental and oral health care services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Topchoice Medical (600763 CH)

Quiddity Aggregation of CSI300/500 and SSE50/180 Index Flows for Dec 2023: US$4.2bn One-Way!

Large Mainland China index flows coming up. I expect the CSI300/500 and the SSE50/180 Inclusion and Exclusion events to take place at the close of...

Janaghan Jeyakumar, CFA

Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

CSI300 Index Rebalance: 14 Changes & A Few Surprises

There are 14 changes for the CSI300 in December. Most of the changes were expected and there are a few surprises as the index committee has...

Brian Freitas

Pre-IPO Malo Medical Management - Profit Model Is Not Mature; Future Expansion Is Worrying

Malo is still at early stage of development, with unsatisfactory gross margin, which would affect its profitability and expansion outlook in the...

Xinyao (Criss) Wang

Pre-IPO Shulan Health Management - Hard to Bring Investors Expected Returns Due to Poor Profit Model

Even with the endorsement of renowned academician Dr. Li Lanjuan, Shulan's profitability/national expansion ability remain a concern.Investors...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)